• N/A ECB Governing Council meeting, followed by an interest rate announcement
and a press conference by President Mario Draghi - Frankfurt

• N/A Bank of Japan monetary policy meeting (to Mar. 9) - Tokyo

• 07:00 The Riksbank invites interested parties to a discussion on the role and significance of the inflation target – Stockholm

• 16:00 One Bank Flagship Seminar by musician and composer Dame Evelyn Glennie hosted at the Bank of England - London

Currency Summaries

EUR/USD is likely to find support at 1.2367 levels and currently trading at 1.2411 levels. The pair has made session high at 1.2425 and hit lows at 1.2403 levels. Euro declined against the dollar on Wednesday after a strong advocate of free trade resigned from the White House, fanning fears that U.S. President Donald Trump will proceed with protectionist tariffs and risk a global trade war.Doubts among traders persist over whether Trump's proposed tariffs on imported steel and aluminum will be enacted, even after the White House signaled they would go into effect following the resignation of Gary Cohn, the director of the National Economic Council. Traders also are looking to gauge the level of possible retaliation from the European Union, Canada, Mexico and other major U.S. trade partners if these stiff levies were to be implemented. Cohn's departure comes against the backdrop of steps by the Trump administration to assert protectionist policies, including withdrawing the United States from the Trans-Pacific Partnership, instigating a renegotiation of NAFTA and imposing hefty import tariffs on some targeted products. The dollar and global stock markets initially sagged on the Cohn departure. But the U.S. dollar recovered most of its overnight losses as some investors wagered that even with the departure of Trump's chief economic adviser Gary Cohn, the president's hard talk could be a tactic amid ongoing trade negotiations with Canada and Mexico.

GBP/USD is supported in the range of 1.3835 levels and currently trading at 1.3899 levels. It reached session high at 1.3901 and dropped to session low at 1.3851 levels. Sterling strengthened against recovering dollar on Wednesday as the release of the European Union's draft guidelines for a future trade deal with Britain underlined the gap between the two sides as they negotiate a Brexit deal. British finance minister Philip Hammond said that financial services should be at the heart of a new trade deal but the EU has rejected that approach and wants to limit the sector's market access after Brexit. Brussels has refused to let Britain pick and choose the parts of the EU's single market to which it can continue to have free access, chief among them the United Kingdom's large financial services industry. Britain is racing to clinch a Brexit transition deal that Hammond repeated on Wednesday would be concluded later this month, but uncertainty about whether that is feasible has weighed on the pound, even as more hawkish signals from the Bank of England about rate rises this year have supported the pound. The greenback staged a steady recovery during U.S. trading. The index that tracks the dollar versus six currencies rose 0.135 points or 0.15 percent, to 89.753, rebounding from an earlier low of 89.407.The dollar's bounce was further stoked by encouraging data on domestic private hiring and labor costs that reinforced the view of underlying strength in the U.S. economy. However, those figures were mitigated by a larger-than-forecast widening of the U.S. trade deficit in January.

USD/CAD is supported at 1.2841 levels and is trading at 1.2906 levels. It has made session high at 1.3002 and lows at 1.2890 levels. The Canadian dollar dipped against its U.S. counterpart on Wednesday as expectations fell for further Bank of Canada interest rate hikes over the coming months after the central bank worried about trade policy developments. The Bank of Canada said that trade policy is an "important and growing source of uncertainty for the global and Canadian outlooks," as it left its benchmark interest rate unchanged at 1.25 percent. Canada sends 75 percent of its exports to the United States. Its economy could be hurt by an uncertain outlook for the North American Free Trade Agreement and planned U.S. tariffs on steel and aluminum. The resignation of top U.S. economic adviser Gary Cohn could give free trade skeptics the upper hand in the White House. The Bank of Canada has raised its benchmark interest rate three times since July. The amount of further tightening anticipated this year by money markets slipped to 44 bps from 50 basis points on Tuesday. Canada's trade deficit narrowed more than expected to C$1.91 billion in January as imports pulled back from a record high, but exports tumbled by the most in six months, data from Statistics Canada showed. The price of oil, one of Canada's major exports, fell after U.S. government data showed an increase in inventories and as financial markets slid. U.S. crude prices were down 2.8 percent at $60.84 a barrel. The Canadian dollar was trading at C$1.2913 to the greenback in the late US session.

AUD/USD is supported around 0.7754 levels and currently trading at 0.7820 levels. It hit session high at 0.7828 and made session lows at 0.7786 levels. The Australian dollar gains faded against the US dollar on Wednesday as renewed concerns about the risk of a global trade war spooked investors, while a soft reading on Australian economic growth added insult to injury. The Aussie dollar was last trading at $0.7822, having been as high as $0.7842 at one stage overnight. The Aussie had bounced on Tuesday when South Korea said it would hold its first summit with the North in more than a decade, reducing geopolitical tensions. Yet they ran into selling in early Asian hours after a key advocate for free trade in the White House resigned, fanning fears President Donald Trump would go ahead with tariffs and risk a trade war. Australia is an open economy that relies heavily on commodity exports and stands to be a major loser in such a war. Reserve Bank of Australia (RBA) Governor Philip Lowe was moved to call the proposed tariffs "highly regrettable and bad policy", strong words for a typically sober policy maker. The economy could do without such headwinds as data out Wednesday showed growth had already slowed late last year. Gross domestic product (GDP) rose a tepid 0.4 percent in the December quarter, while the annual pace braked to 2.4 percent from 2.9 percent.

Equities Recap

European shares clawed back losses on Wednesday as deal-making speculation reinvigorated trading following a muted start to the session.

UK's benchmark FTSE 100 closed up by 0.2 percent, the pan-European FTSEurofirst 300 ended the day up by 0.33 percent, Germany's Dax ended up by 1.1 percent, France’s CAC finished the day up by 0.4 percent.

The S&P 500 ended slightly lower after Wednesday's volatile session as investors struggled to get a read on U.S. trade policy after President Donald Trump promised hefty import tariffs but then said Mexico and Canada could be exempt.

Dow Jones closed down by 0.33 percent, S&P 500 ended up by 0.05 percent, Nasdaq finished the day up by 0.34 percent.

Treasuries Recap

Treasuries were little changed on the day Wednesday in choppy trading as investors weighed the risks of trade wars following the resignation of Gary Cohn, the top economic advisor to U.S. President Donald Trump, and the prospect of a more hawkish Federal Reserve as economic momentum improves.

Benchmark 10-year notes were last little changed from Tuesday at yields of 2.88 percent, though trading was choppy through the day.

Commodities Recap

Gold prices slipped on Wednesday after hitting a one-week high on news that a top economic advisor to the Trump administration had resigned, stoking fears of a trade war and knocking down the dollar.

Spot gold dropped 0.6 percent at $1,325.51 per ounce by 1:34 p.m. EST (1834 GMT), after touching $1,340.42, its highest since Feb. 26. U.S. gold futures for April delivery settled down $7.60, or 0.6 percent, at $1,327.60 per ounce.

Oil prices tumbled on Wednesday as financial markets slid amid concerns that Washington's plans for import tariffs could spark a trade war, and after U.S. government data showed an increase in crude inventories and output.

Brent crude futures for May delivery fell $1.45 to settle at $64.34 a barrel, a 2.20 percent loss. Brent traded between $63.83 and $65.80 during the session.
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West Texas Intermediate (WTI) crude futures for April delivery fell $1.45 to settle at $61.15 a barrel. It fell 2.3 percent on the day, its biggest daily percentage loss since Feb. 9, and traded between $60.58 and $62.58.

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